Water resources are finite, and are critical for life and economic growth. The per capita water availability in India has declined over the years and is likely to reach a water scarce situation in the coming days. Estimates show that water demand for various uses will far exceed the water supply in future. There is thus a need to address this situation by using the water budgeting approach. A water budget is a hydrological tool based on conservation of mass, stating that for a catchment area, the difference between total water inflow and outflow equals the change in storage over a specific period.

Key components of a water budget are various inputs i.e. precipitation, surface water inflow and groundwater; output i.e. evapotranspiration, surface water outflow and groundwater discharge, and change in storage which is the difference between input and output volumes. Thus, water budgeting is a management technique that treats water resources like a bank account calculating inflows (precipitation, supply) against outflows (uses, evaporation) to ensure sustainability.

Water budgeting promotes sustainability by helping communities to identify water risk, minimize losses and manage water resources efficiently; provides scientific and data-driven insights into water availability (surface water and groundwater) allowing for better long-term planning; optimizes agricultural productivity; allows farmers to match crop plan to available water, reducing the risk of crop failure during droughts; promoting efficient irrigation system (drift/sprinkler) in agriculture; improving drought preparedness, and monitoring recharge rate of groundwater. Water budgeting is, however, a data-intensive approach and is technically challenging.

For example, sometimes data on complex hydrological processes such as evaporation, transportation and infiltration are required, resulting in high implementation cost (efficient systems used such as drip/sprinkler system). A water budget demands accurate data. Effective water budgeting depends on users’ compliance requiring behavioral change of water users. Water budgeting enables sustainable water management by promoting equitable, efficient and proactive resource allocation. Key advantages of water budgeting are: it helps in identifying water availability and water consumptions to plan for shortage and avoid critical deficiencies.

It identifies wasteful resources and helps set water conservation targets reducing unproductive losses from evaporation or deep drainage; provides a scientific basis for managing groundwater and surface water helping policy-makers in water management; addresses increasing water scarcity caused by erratic rainfall and global warming by enabling better proactive management, and helps in maintaining ecosystem needs by limiting excessive extraction and ensuring sustainable levels of water uses. If the water budgeting approach shows a water deficit, there is a need to improve water conservation and adoption of water demand-side management.

If the water budgeting approach shows surplus water in a particular area, effective water management to use the surplus water in deficit areas should be undertaken. Water budgeting has the potential to become the cornerstone in India’s transition towards sustainable development and Viksit Bharat 2047. The future scenario on water in India is not encouraging. The World Bank in 2012 estimated that if the current trends continue, in 20 years, about 60 per cent of India’s aquifers will be in critical condition. The Water Resources Group (2009) estimated that by 2030, water demand in India will grow to about 1.5 trillion m3 against current water supply of about 740 billion m3 unless effective actions are taken.

These estimates call for a need to act effectively as shortage of water means poor quality of life, less food and lower economic growth. Water budgeting is prevalent in many countries such as Austria, Brazil, Canada, Italy, the UAE, and the USA with respect to specific regions, river basins/public area. Use of precipitation, evapotranspiration, runoff, surface storage, groundwater recharge, soil moisture etc. are adopted and information is gathered from remote sensing and other available data in these countries. The water budgeting efforts in India are not new.

In the Atal Bhujal Yojna programme (December 2019) of the Central Government, the water budget in seven states is being prepared by the community or Gram Panchayat which indicates whether a Gram Panchayat is water surplus or water deficit helping the community to utilise water judiciously and for future planning. In Kerala, the water budgeting efforts (2023) were carried out by CWRDM (Centre for Water Resources Development and Management) in collaboration with various departments in the state. Water availability in Kerala is calculated based on rainfall, land use, and runoff coefficients while accounting for water supply. Water demand is estimated for domestic, agricultural, livestock, industrial and tourism needs, based on population and land use data.

The National Water Mission under Ministry of Jal Shakti promoted water budgeting (2018) as a data-driven tool for sustainable water management, focusing on balancing water demand and supply at local and basin levels, especially for agriculture, industry, and domestic use. In November 2025, the Niti Aayog released a report on ‘Water Budgeting’ in 18 Aspirational Blocks highlighting the needs for context-specific adaptive strategies, particularly in regions marked by competing water demand, ecological vulnerability, and infrastructural limitations.

The NITI Aayog, in association with various stakeholders, developed the water budgeting approach by using the ‘Varuni App’, employing scientific methods to understand block characteristics through appropriate use of spatial and nonspatial data sets. The components of water demand, as developed by NITI Aayog, in 18 Aspirational blocks are: domestic water demand, livestock water demand, agriculture water period and industrial water demand.

The components of water supply are calculated with surface run off, surface water supply, groundwater supply, and water source from outside geography. For water budgeting efforts, all sources of water are measured through information on rainfall, glaciers, springs, rivers, water storage structures, wetlands, tanks, groundwater, coastal water and wastewater by estimating the availability, usability, supply, demand and consumption on an annual basis. At the same time, usable water in various sectors such as forestry and wildlife, farm sector, industry, infrastructure, institution, drinking water and domestic use are based on past use.

Water Budgeting at the State level is yet to be completed in India. For water budgeting, the ‘Varuni App’, as developed for block level assessment by NITI Aayog, has the potential to be modified for application at village, GP, district, and state level. To begin with, water budgeting can be prepared on a pilot basis at all levels. And the information relating to budgeting should be placed in the public domain. Second, water budgeting needs availability of technical data at various levels on various items. Accurate data availability on all aspects is a complicated task. Capacity building on application of ‘Varuni App’ at all levels is a must.

Third, there is a need to involve all stakeholders such as farmers, local bodies, functionaries, industry representatives, indigenous communities and the general public to foster stakeholder engagement for the water-budgeting process, for participatory decision-making, and for addressing the agenda of policy makers. Fourth, the Water Policy of the Central Government and the states, should incorporate the need and details for water budgeting at all levels. A time-bound action plan for the preparation and implementation of water budgeting at all levels should be the agenda of the Centre and States. There is a need to introduce water budgeting concepts in all national policies and programmes.

(The writer is a Distinguished Fellow, TERI, New Delhi and a former Secretary, Ministry of Water Resources, Govt. of India)

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